Wednesday, 1 November 2017

On the application of Art. 19.2 Service Regulation in Greece

In a recent ruling, the Supreme Court dismissed the cassation against an appellate decision, confirming the findings of the first instance ruling, which applied Art. 19.2 Service Regulation, following the return of a non-service certificate by an Italian bailiff. The interesting part of the judgment is related to the presumption of the Supreme Court that failure of the defendant to notify his change of abode, allows a court to continue with the proceedings, even when the change occurred before lis pendens.

[Supreme Court 1130/2017, unreported]

THE FACTS: The litigants are two companies from Greece [G] and Italy [I] respectively. They concluded a subcontract for work in June 2002. According to the agreement, the Greek company would have to prepare a set of decorative constructions in a store in Athens. The Italian company would then cover all expenses and fees. Upon completion of the work, [I] was in default of payment for the sum of 80.381 Euros. [G] filed an action for the above sum before the Athens 1st Instance court. The claim was properly transmitted from the competent Greek authority to the Italian counterpart (Rome office of court bailiffs), which confirmed receipt of the documents. Some weeks later, the latter sent back to the Greek Authority a certificate of the Vicenza Prosecutor’s Office, and another of a bailiff appointed at the Vicenza 1st Instance court, stating that the claim could not be served, because [I] has changed its seat. Based on the facts aforementioned, the Athens 1st Instance court continued with the proceedings. [G] was successful in both instances [Athens First Instance Court, default Judgment Nr. 2465/2010 & Athens CoA, Judgment Nr. 3892/2014, both unreported]. [I] appealed before the Supreme Court; one of the grounds for cassation was improper service pursuant to the Service Regulation.

THE RULING: The Supreme Court began its analysis by stating the prevalence of the Service Regulation over domestic law and the 1965 Hague Service Convention, whenever a document needs to be served within an EU Member State. Passing through Articles 6, 7 & 10 Service Regulation, it landed on Art. 19 Paras 1 & 2, stressing out that Greece has made a declaration, allowing domestic judges to proceed with the hearing upon fulfilment of the conditions set under Art. 19.2.
Departing from the factual situation described above, the Supreme Court endorsed the reasoning of the Athens CoA: All conditions set under Art. 19.2 Service Regulation have been met, i.e. service by one of the methods provided by the Regulation; lapse of the 6-months period; no service made, despite the efforts of the Italian Authorities. In particular, so the Supreme Court, the efforts remained fruitless because of [I’s] transfer of seat, and the omission of the latter to notify its new registered office, so that the Authorities could have served the claim there.
For the reasons above, the Supreme Court dismissed the cassation.

COMMENTS: Greece is one of the Member States which proceeded to the declaration pursuant to Art. 23.1 Service Regulation. Case law and legal authority concur that the point of departure for calculating the six month period is that of the transmission of the document from the Greek to the foreign Authority. 

I. An issue still not entirely clarified, is the first condition of Art. 19.2 (c), i.e. that no certificate of any kind has been received. Courts are divided: Some instance courts construe the provision verbatim; hence, whatever document is sent by the Receiving Authority, i.e. either a service or a non-service certificate, is considered sufficient for rejecting the application of Art. 19.2. On the other side, the Supreme Court and the major part of instance courts interpret the rule as referring solely to certificates of service. 

II. A second and even more intriguing issue is intertwined with the content of a non-service certificate. Some of the variations are listed in the standardized certificate issued under Art. 10 of the Regulation. There are four alternatives under Nr. 15 of the model certificate:
15.1. Address unknown
15.2. Addressee cannot be located
15.3. Document could not be served before the date or time limit stated in point 6.2.
15.4. Others (please specify).
Nr. 15.1 leads undoubtedly to the non-application of Art. 19.2: If the recipient is of unknown residence, Art. 1.2 comes to the fore, so national law becomes again decisive.

Nr. 15.3 is not relevant to the issue at stake.

Nr. 15.4 is to be examined (and specified) only if Nr. 15.2 does not provide a convincing reason. 
Nr. 15.2 refers to the situation where the addressee cannot be located. In practice, Authorities add to this phrase some additional explanations: 
i)                    Not located, because there is no visible indication that the addressee was ever a resident there.
ii)                  Not located, because the addressee was there, but he moved to another place inside the country, which is known.
iii)                Not located, because the addressee was there, but he moved to another place inside the country, which is not known.
iv)                Not located, because the addressee was there, but he moved to another place outside the country, which is known.
v)                  Not located, because the addressee was there, but he moved to another place outside the country, which is not known.

Point i) resembles to Nr. 15.1; thus, it leads to non-applicability of the Service Regulation (Art. 1.2). Further on, with respect to points ii) and iv), we may argue about the existence of a potential obligation imposed on the Receiving Authority to engage in further action, with the aim to serve the document to the recipient’s new abode. The latter is however to be excluded for Point v). 
 Our case falls under point iii). The Supreme Court concluded that the Italian Authority did its best, or, as the text of the provision stipulates, every reasonable effort has been made to obtain it. It is of course not directly evidenced by Art. 6-7 of the Regulation that the Receiving Authority is obliged to proceed to further scrutiny, when the recipient is not to be found in the address stated in the claim. Still, what we’re dealing with (in our case) is a company, i.e. a legal entity registered in accordance with the rules and regulations of Italy. Hence, the broader question: Is it to be expected by the Receiving Authorities of any Member State that they proceed to further action in cases such as the present one, or should they just return the documents back to the country of origin?

III. Finally, some skepticism should be voiced in regards to the Supreme Court’s position, which confirmed the application of Art. 19.2 on the basis of the recipient’s failure to inform the Italian authorities on its new seat. It is widely acknowledged that the purpose of the provision is to establish a counterbalance to the strict rules posed by Art. 19.1: The defense rights of the addressee need to be prioritized; however, the right to judicial relief is also worthy of protection. Nevertheless, for passing to the latter, we need to be sure that the former has been respected, at least in essence. 
In the case at hand, we have a plaintiff who files a claim against an Italian company, by stating a certain address in the foreign country. Following transmission, it becomes evident that the defendant was not a resident in the address mentioned in the claim. It is the duty of the plaintiff to state a proper address, where the defendant may be found. On the other side, [I] was not legally obliged to inform [G] as to its transfer of seat prior to lis pendens. The opposite would have been the case if it had already received notice of the proceedings. By blaming the defendant for not having informed the Italian Authority as to its new seat, the Supreme Court gives carte blanche to the plaintiff to move ahead with the proceedings, although the address stated in the claim does not coincide with the actual seat of the defendant. In this way, the Supreme Court seems to establish an obligation to every (potential!) litigant, to inform the Authorities (which Authorities actually?) of his new abode, in the event that a claim would need to be served against him in the future. It might have been more reasonable to ask the plaintiff to conduct his own research, in order to trace the defendant’s new seat, and serve the claim afresh.



Post a Comment

Subscribe to Post Comments [Atom]

<< Home